CLIENT ALERT: Massachusetts Paid Family & Medical Leave Update
POTENTIAL THREE MONTH DELAY OF START OF THE PAYROLL TAX TO FUND PFML PROGRAM
Governor Charlie Baker, Senate President Karen Spilka, and House Speaker Robert DeLeo issued a joint statement on the evening of June 11, 2019, agreeing to delay the start of the payroll tax to fund the Massachusetts Paid Family and Medical Leave program from July 1, 2019, until October 1, 2019, stating:
"To ensure businesses have adequate time to implement the state’s Paid Family and Medical Leave program, the House, Senate, and Administration have agreed to adopt a three month delay to the start of required contributions to the program. We will also adopt technical changes to clarify program design. We look forward to the successful implementation of this program this fall,”
It is important to note, though expected to pass, the legislature still has to vote to adopt the delay.
We will continue to update you as news becomes available. Your payroll service will also likely be a good source of on-going information.
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The Massachusetts Paid Family and Medical Leave law (PFML) requires most private employers to provide employees (including 1099 contract workers) with paid family and medical leave - up to 12 weeks for eligible employees to care for a family member, and up to 20 weeks for the employee’s own serious health condition. Leave will be available beginning in January 2021.
A new MA Department of Family and Medical Leave (DFML) has been established to oversee this regulatory process. The DFML website is an important source of information about the law for employees and employers: https://www.mass.gov/orgs/department-of-family-and-medical-leave.
Benefits covered under the PFML will be paid for using employee contributions through payroll withholding and contributions from larger employers (over 25 employees). Total contributions to the Department of Family and Medical Leave will be 00.63 percent of eligible payroll, a portion of which employers can pass on to employees. More information about employer/employee contributions can be found in the Employer Notice to Employee template located on the DFML website:
TIMELINE
By June 30, 2019:
Employers are required to post a Workplace Poster and notify their current and newly employed workers (covered Massachusetts W2 employees and Massachusetts 1099-MISC contractors) about the PFML program, including its benefits and protections that apply to them, and obtain written acknowledgment that notice has been given.
The Workplace Poster can be found here: https://www.mass.gov/files/documents/2019/03/21/20190321_DFML%20Notice_FINAL.pdf
DMFL templates for worker notices can be found here: https://www.mass.gov/info-details/informing-your-workforce-about-paid-family-and-medical-leave#written-notice-requirements-
Beginning on July 1, 2019:
Employers will deduct payroll contributions from a covered individual’s wages or other earnings to fund PFML benefits. Employers are responsible for remitting family and medical leave contributions on behalf of employees to the Department of Family and Medical Leave through payroll deductions.
Contributions by larger employers begin effective July 1, 2019 - with 1st quarterly installment due October 31, 2019 to MassTaxConnect.
Employers with less than 25 employees will not be required to pay the employer’s contribution but will still need to remit worker payments to the Department of Family and Medical Leave.
More detailed information about employer contributions and reporting obligations can be found here:
https://www.mass.gov/info-details/family-and-medical-leave-contribution-rates-for-employers
Beginning on January 1, 2021:
Covered individuals may be entitled to:
- up to 20 weeks of paid medical leave in a benefit year if they have a serious health condition that incapacitates them from work.
- up to 12 weeks of paid family leave in a benefit year related to the birth, adoption, or foster care placement of a child, or because of a qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call to active duty in the Armed Forces.
- up to 26 weeks of paid family leave in a benefit year to care for a family member who is a covered service member with a serious health condition.
Beginning on July 1, 2021:
Covered individuals may be entitled to up to 12 weeks of paid family leave to care for a family member with a serious health condition. Covered individuals are eligible for no more than 26 total weeks, in the aggregate, of paid family and medical leave in a single benefit year.
KEY ASPECTS OF PFML
Covered Workers:
Generally, the law covers:
- workers paid wages by a Massachusetts employer; or
- workers paid for contract services by a Massachusetts entity that is required to report payment for services on IRS Form 1099-MISC for more than 50 percent of its workforce; or
- a self-employed individual who resides in Massachusetts and chooses to opt-in to the program who reside in Massachusetts and who are paid wages by a Massachusetts employer; and is paid for contract services by a Massachusetts entity that is required to report payment for services on IRS Form 1099-MISC for more than 50 percent of its workforce; or
- a self-employed individual who resides in Massachusetts and chooses to opt-in to the program.
Employer Contributions:
Employers with 25 or more employees will be required to remit a contribution to the Department of Family and Medical Leave of 00.63 percent of eligible payroll. This contribution can be split between employee payroll deductions and an employer contribution and will support both types of leave. More information from DFML about employer contributions can be found here:
Job Protection:
Generally, an employee who has taken paid family or medical leave must be restored to the employee’s previous position or to an equal position, with the same status, pay, employment benefits, length-of-service credit, and seniority as of the date of leave. (These job protections do not apply to contractors.)
Continuation of Health Insurance:
Employers must continue to provide for and contribute to the employee’s employment-related health insurance benefits, if any, at the level and under the conditions coverage would have been provided if the employee had continued working continuously for the duration of the leave.
No Retaliation or Discrimination:
It is unlawful for an employer to discriminate or retaliate against an employee for exercising any right to which the employee is entitled under the law.
Weekly Benefits:
To fund PFML benefits, employers will deduct payroll contributions from a covered individual’s wages or other earnings beginning on July 1, 2019. A covered individual’s average weekly earnings will determine his or her benefit amount, for a maximum weekly benefit of up to $850.
Exemption from Employer Contributions – Private Plans:
Massachusetts employers that offer approved private plans with paid leave benefits that are equal to or more generous than those provided under the Paid Family and Medical Leave (PFML) program may obtain an exemption from making family or medical leave contributions to the Department of Family and Medical Leave.
Employees continue to be protected from discrimination and retaliation under the law even when an employer opts to provide paid leave benefits through a private plan.
More information about employer exemption can be found here: . https://www.mass.gov/info-details/exemptions-from-paid-family-and-medical-leave-for-private-plans
SOURCES OF LAW
Statute: MGL c.175M as added by St. 2018, c.121.
Draft regulations released by the Executive Office of Labor and Workforce Development, Department of Family and Medical Leave can be found here: https://www.mass.gov/files/documents/2019/03/29/3-29-19%20Draft%20Regulations%20for%20Public%20Comment_0.pdf
Final regulations are expected to be issued in July 2019.